Disclosure of Corporate Governance Compliance and the Performance of three (3) State Owned Commercial Banks (SOCBs) in Bangladesh by Accounting Department, Jahangirnagar University

2. EXTREMOPHILE
PRESENT
Disclosure of Corporate Governance Compliance
and the Performance of three (3) State Owned
Commercial Banks (SOCBs) in Bangladesh

3. Introduction:
Corporate Governance is the component of systems & practices by which a
company’s board of directors build sure responsibility, fairness &
translucence in a relationship between company & stake container.
In our report format, we investigation the disclosure of corporate governance
of 3 banks. Those banks are:
Agrani Bank
Rupali Bank
Janata Bank
The corporate governance of the 3 Banks are constructed on Bangladesh
Bank (BB) & Bangladesh Securities and Exchange Commission (BSEC).

4. The Literature Review is the procedure of interpretation, investigating,
assessing, and brief scholarly materials about an exact topic.
In this report, we try to find out the amount of disclosure under the Bangladesh
Bank & Bangladesh Securities and Exchange commission are followed by each
of the Bank.
Literature Review

5. Significance
We distinguish that corporate governance helps to
prevent corporate shames, deception, and
potential civil and illegal liability of the
organization. It is also good for a business. A
corporate governance image expand the status of
the organization and makes it more charming to
customers, depositors, suppliers and, in the case
of nonprofit administrations, contributors.

6. Objective
To examine corporate governance rehearsal of three (3) State Owned
Commercial Banks (SOCBs) in Bangladesh” with mention of mandatory
disclosure explained by Bangladesh Bank (BB) & Bangladesh Securities
and Exchange Commission (BSEC).
To offer proposals based on the conclusions
The basic objective of the study is to measure the corporate governance
compliances disclosures of SOCBs in Bangladesh. Other objectives of the
study include the followings:

7. To examine the extent to which the SOCBs
comply with the corporate governance
guidelines provided by BSEC and BB.
2. To explore the corporate governance (CG)
practices in terms of disclosure SOCBs.
3. Compare the extent of disclosures among the
SOCBs.

8. Non accessibility of definite data about the
disclosure of corporate governance of Sonali
Bank, it was very problematic for us to find
out vital information from the annual report
of the bank & we failed to examine the
related presentation of all 3 banks. So that
we could not mention or suggest anything.
Limitations

9. Disclosure objects have been designated
from the Notifications on Corporate
Governance Issued by Bangladesh
Securities and Exchange Commission
(BSEC) and Corporate Governance
procedures issued by Bangladesh Bank.
Selection of Disclosure Items

10. The data for this study have been accumulated from the audited
annual financial reports and annual report for the year of 2013.
Sources of data used in the study are as follows-
Annual Report for all SOCBs in Bangladesh for the year of 2013
Circular issued by the Banking Regulation and Policy Department
(BRPD) of Bangladesh Bank regarding corporate governance
Notification Issued by Bangladesh Securities and Exchange
Commission (BSEC) and guidelines about corporate governance.
Sources of data

11. To ensure good governance i.e. corporate governance in bank
management, Bangladesh Bank (BB) issued three circulars in 2013
covering three broad areas as follows:
1. BRPD Circular No.11 dated 27 October 2013: Formation and
responsibilities of Board of Directors (BoD).
2. BRPD Circular Letter No. 18 dated 27 October 2013:
Appointment and responsibilities of Chief Executive Officer
(CEO).
3. BRPD Circular Letter No. 19 dated 27 October 2013:
Contractual appointment of Advisor and Consultant.
Selection of Disclosure Items from BB Circulars

12. Explanation of disclosure items
Disclosure of
Compliance
Key
Total
number of
disclosure
items
Percentage
of total
number
disclosure
items
Formation and Responsibilities of Board of
Directors(BoD)
FRBD 44 60.27%
Appointment and Responsibilities of Chief Executive
Officer (CEO)
ARCEO 17 23.29%
Contractual Appointment of Advisor and Consultant CAAC 12 16.44%
Total Items 73 100%
From the corporate governance compliance guidelines of BB three (03) disclosure compliance
topics have been selected for this study. Here, the bold and underlined alphabets of each word
represent as a short disclosure compliance key form.

13. The Bangladesh Securities and Exchange Commission
(BSEC) issued Corporate Governance (CG) Guidelines in
2012 which is being followed by banks on ‘Comply’
basis. The summary of the checklists that each bank
complies with the said CG guidelines issued by BSEC
through Notification no. SEC/CMRRCD/2006-
158/134/Admin/44 dated 07 August 2012 issued under
section 2CC of the Securities and Exchange Ordinance,
1969 is as follows:
Selection of Disclosure Items from BSEC notifications

14. Explanation of disclosure items
Disclosure of
Compliance
Key
Total
number of
disclosure
items
Percentage of
total number
disclosure
items
Board of Directors BD 45 47.36%
Chief Financial Officer(CFO), Head of Internal Audit and
Company Secretary
CHC 2 2.11%
Audit Committee AC 28 29.47%
External/ Statutory Auditors ESA 9 9.47%
Subsidiary Company SC 5 5.26%
Duties of Chief Executive officer(CEO) and Chief Financial
Officer(CFO)
DCEFO 4 4.21%
Reporting and Compliance of Corporate Governance RCC 2 2.12%
Total Items 95 100%
From the corporate governance compliance guidelines of BSEC seven (07) disclosure
compliance topics have been selected for this study. Here, the bold and underlined alphabets of
each word represent as a short disclosure compliance key form.

15. Types of study: Analytical Study
Type of Data: Secondary
Methodology of the Study:

16. We have found how many
disclosers of corporate
governance under the Bangladesh
Bank and Bangladesh Securities
and Exchange Commission are
followed by the Three Banks.
Findings and Analysis

17. Information obtained regarding
the corporate governance
compliance guidelines provided
by Bangladesh Securities and
Exchange Commission (BSEC)
Analysis related to Disclosure

18. Sources BoD(45) CHC(2) AC(28) ESA(9) SC(5) DCEFO (4) RCC(2)
Total
Disclosure(95)
Corporate
Governance
Compliance section
45 1 28 8 5 3 2 92
Chairman’s Report
Directors Report
Auditors Report
Notes to the financial
statements
Other sources
No Disclosure 1 1 1 3
Total 45 02 28 9 5 4 2 95
Analysis related to Disclosure
Name of the Bank: Rupali Bank

19. Sources BoD(45) CHC(2) AC(28) ESA(9) SC(5) DCEFO (4) RCC(2) Total Disclosure(95)
Corporate
Governance
Compliance
section
45 2 28 8 5 3 2 93
Chairman’s
Report
Directors Report
Auditors Report
Notes to the
financial
statements
Other sources
No Disclosure 1 1 2
Total 45 02 28 9 5 4 2 95
Name o f the Bank: Janata Bank

20. Sources FBoD (44) ARCEO (17) CAAC (12) Total Disclosure (73)
Corporate Governance
Compliance section
17 5 0
Chairman’s Report
Director’s Report
Auditor’s Report
Notes to the financial
statements
Other Sources
No disclosure
Total 44 17 12 73
Bangladesh Bank Guidelines
Name of the Bank: Rupali Bank

21. Sources FB oD (44) ARCEO (17) CAAC (12) Total Disclosure (73)
Corporate Governance
Compliance section
14 5 1
Chairman’s Report
Director’s Report
Auditor’s Report
Notes to the financial
statements
Other Sources
No disclosure
Total 44 17 12 73
Name of the Bank: Agrani Bank

22. Sources FBoD (44) ARCEO (17) CAAC (12)
Total Disclosure
(73)
Corporate
Governance
Compliance section
17 5
Chairman’s Report
Director’s Report
Auditor’s Report
Notes to the
financial statements
Other Sources
No disclosure
Total 44 17 12 73
Name o f the Bank: Janata Bank

23. Sl. No. Name of the ratio SBL JBL ABL RBL
1.0 Liquidity
1.01 Current ratio 1.04 2.21:1
1.02
2.0 Activity
2.01
Fixed assets turnover
2.02 Total assets turnover
2.03
Accounts Receivable Turnover
3.0 Profitability
3.01 Net profit ratio 44.43% 22.00%
3.02 Return on assets 1.42% 2.04%
3.03
Earnings per share (Taka) 86.31 91.28
3.04
Return on investment 9.39% 7.43%
4.0 Solvency/Leverage
4.01
Debt to total assets ratio 0.92
Analysis Related to Performance

24. 4.0 Solvency/Leverage
4.01
Debt to total assets ratio 0.92
4.02
Loans & advances to deposit ratio 58.21%
4.03
Loans & advances to total assets ratio 45.70%
4.04
Provision to total loans & advances 9.35%
5.0 Credit Quality
5.01
Non performing/classified loans (NPLs) 31766.86 million 35800 million
5.02
Specific provision 19,015.33 million 1,6871.5 million
5.03
General provision 4,072.89 million 2115.6 million
5.04
NPL to total loans and advance 11.12%
6.0
Efficiency / Productivity Ratios
6.01
Return on average equity (ROE) 30.09% 25.98%
6.02
Return on average assets (ROA) 1.42% 2.07%
6.03 Cost to income ratio 77.98% 74.15%
6.04 Cash reserve ratio 5.70%

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